Note that the consensus (based on news reports, not a formal sampling) was for OPEC to cut 1 million barrels now, with another 1 million in the offing. OPEC announced a deeper immediate cut and left open the possibility of another reduction in December.

The Organization of Petroleum Exporting Countries agreed to cut oil production for the first time in almost two years to stem a collapse in prices.

Oil ministers of the 13 OPEC nations decided to reduce supply by 1.5 million barrels a day from November, ministers said today as they left a meeting at the group’s Vienna’s headquarters.

The decision was “quick,” Saudi Arabian Oil Minister Ali al-Naimi said in an interview after the meeting. The cut will be from the existing quota for 11 members of 28.8 million barrels a day, Kuwait’s oil minister said…Another cut in December is “possible,” depending on how the oil market reacts, Qatari Oil Minister Abdullah bin Hamad al-Attiyah said in an interview after the decision.

At a meeting last month, OPEC urged greater compliance with existing quotas, saying that would reduce supply by about 500,000 barrels a day. OPEC members excluding Iraq and Indonesia last month pumped 390,000 barrels a day more than their combined quota of 28.8 million barrels a day, according to Bloomberg estimates.

Note that the last paragraph illustrates the flaw with the production cuts. As reader Michael pointed out, this is a classic prisoner’s dilemma. If everyone complies, all are a wee bit better off. If most comply and a few cheat, the cheaters are much better off and the obedient suffer a bit. But if most cheat, everyone is a lot worse off. And per the Bloomberg observation, members are cheating even when oil prices were higher. The lower they go, the more pressure to pump more to try to maintain national budgets.

As you mention, getting anyone to agree to production cuts (and cutting off their only real export at a time when capital is dear) is a futile exercise. I’m a chastened oil bull who still holds a core position and will scale back in someday, but owch.

Still pretty ticked off about all the deliberately fudged numbers and regulatory screw-ups, but I guess I could say that about any market these days.

OPEC moves are going (and have been shown) to be irrelevant in current market conditions and oil prices in the near term will face continued downward pressure , potentially falling under $50 a barrel if the current trend is any guide.